South Korean Finance minister Koo Yun Cheol stated on Thursday that the U.S.-South Korea tariff agreement hinged on a partnership package for shipbuilding titled “Make America Shipbuilding Great Again”.
Koo stated that South Korean shipbuilders will lead a partnership worth $150 billion to rebuild the U.S. Shipbuilding Industry.
South Korean officials tried to win over Trump by offering a tie-up in shipbuilding, including the repair of the U.S. Navy fleet. Washington is struggling to keep pace with China’s massive naval buildup.
Koo stated that the most notable aspect of today’s agreement was the 150 billion dollar South Korea-U.S. Shipbuilding Cooperation Package, also known as MASGA or Make America Shipbuilding Again.
Koo said at a press briefing that “I believe the MASGA Project contributed most to today’s Agreement”.
Koo, along with other ministers, met U.S. president Donald Trump at the White House in order to reach an agreement to lower tariffs for South Korean imports by August 1, a deadline Trump had set.
Koo reported that during their meeting Trump stated he wanted ships to be built in the U.S. as quickly as possible under the partnership.
South Korean officials claim that the MASGA project involves the construction of new U.S. shipyards, the training and maintenance of U.S. Navy ships, as well as the training of shipbuilding staff.
Experts say that there are still challenges for Koreans who want to invest in U.S. Shipyards or build ships there. These include, for instance, the difficulty of obtaining steel plates.
South Korea’s defence-to-shipbuilding conglomerate Hanwha Group has been expanding in U.S. shipbuilding. Hanwha Systems, Hanwha Ocean and Hanwha Ocean’s affiliates acquired Pennsylvania-based Philly Shipyard last year for $100 million.
Following the announcement of the agreement on tariffs, which included the shipbuilding partnership, shares in Hanwha Ocean shipbuilder ended the day 13% higher.
Hanwha Systems reported this week that its second-quarter profits fell 60% due to the costs incurred by the acquisition of Philly Shipyard. (Reporting and editing by Ju-min Park and Jihoon Le; Ed Davies)
(source: Reuters)